In the lead up to the Funds of the Future Summit, Hedgeweek® sat down with Alfonso Peccatiello, Founder & CIO of the macro hedge fund Palinuro Capital, which launched in January 2025. He shared his journey as an emerging manager, from navigating shifting market dynamics and rapid technological change to evolving investor expectations.
Peccatiello also touched on his experience as Founder & CEO of The Macro Compass, a macro research platform, and his previous role as Head of Investments for a $20bn portfolio at ING Germany. Don’t miss his keynote session: Architect of Innovation – A Founder’s Blueprint for Tomorrow’s Hedge Fund on 29 April.
We’re clearly in volatile times. What market inefficiencies or macro shifts convinced you now was the time to launch?
At Palinuro Capital we are constantly looking for positive skew, medium-term macro setups. This means we are screening fundamentally the most liquid developed and emerging markets – currencies, rates, equities – worldwide. We wait for moments where we can see something unfolding that the broader market isn’t quite pricing, then we ride the trend.
So, why now? A few years ago, when I was managing money for ING, something like this would’ve been a lot harder. You may get lucky and catch a Fed pivot, but it would be rare.
Today, the world has changed. Germany has announced massive fiscal stimulus – even fiscally orthodox countries like Sweden and Australia are expanding their fiscal stimulus efforts. And in the US, you’re seeing policy that’s never been done before, with a president that is very set on a full-on global trade reshuffle. In this environment, standard beta portfolios aren’t going to cut it.
People always say “take Trump seriously, but don’t take him literally.” What’s your view?
With an exogenous chaos agent like Trump, who changes his mind every few days, you have to shorten your time horizons, and you can’t afford to run short vol. It’s what physicists call an entropy problem, disorderly and unpredictable, and it can stop you out very rapidly.
That said, you can still find signals in the noise. A relatively clear one is a weaker dollar – not necessarily because it’s Trump’s stated goal but rather a byproduct of his policies. It’s not about trade flows but capital flows as foreign investors reassess their US assets. Big institutions like the Norwegian fund or Canadian pension funds, for example, won’t stop investing in the US overnight – there’s too much career risk. But it’s a slow burner macro framework that you have to keep in the back of your mind.
What’s your take on the fundraising landscape for newer managers?
There are really three paths. One, you come out of Millennium or Citadel, spin off and the capital follows because of the pedigree. Two, you start with money from friends and family. Or, three, you go for a day-one seeder. But, they will ask for equity, which can limit your independence.
There is a fourth path – it’s rare, but it worked for me. Through my previous work, I have spent years sharing content and building relationships with institutional investors without expecting anything in return. When it came time to launch, I had day-one tickets on board that didn’t require GP stakes.
People say the 2-and-20 model is outdated. What’s your approach to fees and alignment? And, what can newer managers do to stand out?
Emerging managers should be as transparent as possible – especially with day one investors. It’s almost like mimicking an SMA. Provide daily access to your PnL – let them see your performance, your daily swings.
Everyone thinks you need to slash fees to zero to raise money, but that’s not necessarily how it works. Investors know you’ve got to keep the lights on. As long as incentives are aligned and there is transparency, no one will tell you 1-and-15 with a high watermark and a hurdle is too expensive. But this should be your initiative, not the investors.
Capacity rights are also important. If someone backs you early, give them optionality.
Beyond the headlines, are there second-order geopolitical risks or underpriced macro shifts on your radar?
The long-end bond market sell off has mostly been the function of, what I call, plumbing issues. The funding side has become complicated, and there are imbalances in some of the swap spread trades – and a little bit of basis, too. This can be calmed down by central banks.
What we haven’t seen is concern about the long end in a macro fashion. Contrary to the headlines and the promises, fiscal spending isn’t slowing down, inflation’s still here, spending is high, and there is a chaos agent that threatens the very framework that lets the US borrow endlessly with strong demand.
The real question is: could we end up in a world where the long end sells up to 5.5% or 6%? It’s not ridiculous but it’s definitely not something most people are prepared for.
What’s the real edge of a smaller manager?
Smaller managers have the ability to engage in more markets. If you have an adaptable framework, you don’t have to get the long end of the US right – you could get Colombia or the Czech Republic, any market where there’s less competition and more edge.
Also, being small means you are, by definition, more nimble. You can spot shifts in the world quicker than larger players who are still trading based on what they have done the last 10 years.
